Art of Procurement

Today I am joined on the show by Shawn Burton.  Shawn is General Counsel of Business & General Aviation and Integrated Systems at GE. Shawn was connected to me via a former AOP guest Nick Seiersen and has recently published an article in Harvard Business Review on the virtues of plain language contracting. While we did discuss plain language contracting, and the change and disruption underway in the legal profession – which I thought was a great way to be able to better understand and empathize with our peers in Legal – the main focus of our conversation was a home-grown platform that GE Aviation has built that allows them to be for more strategic in their contract negotiations by assigning a monetary value to each clause they negotiate.

This week on the show, the tables are turned! AOP alumni and Negotiations Ninja host Mark Raffan just interviewed me for an episode of his podcast on the topic of procurement cost savings. I enjoyed the conversation with Mark, and so we decided to simultaneously publish both on Art of Procurement and Negotiations Ninja. In our conversation, Mark dug into that omnipresent procurement metric of cost savings.  I share details of how I have seen most organizations calculate savings, and what is typically off limits. Mark also asks if there are any ways to easily save money – the low hanging fruit – that any procurement function just starting on their maturity journey should focus on.  I really enjoyed our conversation – and the challenge that comes with being on the other side of the microphone!

I spent a couple of days on the road last week at the Coupa Inspire 2018 conference in San Francisco.  Inspire is an event I always try and make – to get insights into Coupa’s latest offerings, to catch up with peers, friends and clients, and to be inspired by fantastic keynote speakers which this year included Alison Levine and Arnold Schwarzenegger. While on site, I had the opportunity to sit down and record today’s podcast with Coupa CEO, and AOP alumni, Rob Bernshteyn.  Over the past couple of months, I have observed Coupa using the term “Community Intelligence” more and more, and it was a key feature of Rob’s keynote. I am very bullish on the impact that we can have in procurement by combining our collective insights end experiences - in fact, it is a key driving force behind AOP. I was interested to learn how Coupa is harnessing the opportunity that community intelligence brings, and how we as procurement professionals can apply this concept to our day to day work.

Over the course of the last 15 years, Tom Beaty has grown Insight Sourcing Group (ISG) from a one-man operation to one of the leading procurement and sourcing consulting firms. Ranked by Inc Magazine among the fastest-growing private companies in America for the last 10 years, ISG is regularly recognized as one of the nation’s best boutique consulting firms to work for. In today’s episode, recorded live at the SIG Spring Summit, I start by asking Tom what he is seeing in the field today in terms of the key challenges that CPO’s are facing, and some of the ways that they are working to solve those challenges.  We then focus on the topic of “what comes after sourcing”. We explore the startling statistic that only 60% of “addressed” spend is actually spent with the contracted supplier, and specifically, how can procurement professionals address and mitigate the risk of the savings leakage that occurs as a result.

My guest on the show today is Brian Bancroft. This is Brian’s second appearance on the show. We originally sat down back in episode 126, and I enjoyed the conversation so much that I have been eager to find an opportunity for us to record another pod. Brian has a wealth of experience across, and outside of the procurement function, and has enjoyed roles including as Senior Director for Indirect Procurement and Shared Services, and then CPO of Asia Pacific and Africa regions for Kellogg’s, and most recently the VP of North America Indirect Procurement, and then of Direct Procurement for The Coca-Cola Company. Since we last talked, Brian has made the move to Church and Dwight, where he is Chief Procurement Officer, embarking on another procurement transformation journey.  And it is procurement transformations that are the subject of our conversation, where I ask Brian to share his learnings from executing a number of transformations around the world.

Digitization is a hot topic in procurement today, and while it will undoubtedly have a big impact on the future of our profession, it is often difficult to separate the hype from the reality.  There are few organizations better positioned to help me explore this topic than HfS Research – a company I have followed for a long time – and their Chief Strategy Officer, Saurabh Gupta. In today’s episode, Saurabh provides a “Three Horizon” roadmap. Horizon One technologies are those that must be explored and utilized today, while Horizon Three technologies are those that are more experimental.  I also question Saurabh to share details of HfS’ “OneOffice” thinking, and to answer a question that has long been on my mind: how exactly an analyst research report is written.

I have long admired Vodafone as being a pioneer in both embracing and supporting supplier enabled innovation and last year Vodafone partnered with the government of Luxembourg to launch what I believe is an innovative approach to working with smaller, growing, companies that they named Tomorrow Street. I wanted to learn more about Vodafone’s approach, and so I invited Warrick Cramer, the CEO of Tomorrow Street, and Mark Perera, the CEO of Old St Labs and a Tomorrow Street partner, to join me on the show. On launching Tomorrow Street, Warrick shared how he had a blank piece of paper in terms of where to position it within the Vodafone organization. I really enjoyed learning why he chose to partner with procurement, and the opportunity that he sees for procurement in facilitating and delivering supplier enabled innovation.

Today’s show comes to you straight from the SIG Spring Summit last week in Washington DC, and features Danny Ertel, the founding partner at Vantage Partners. Danny’s practice focuses on helping buyers and providers of services enter into, manage, and when necessary, remediate their relationships. Danny is a lawyer by training, and prior to founding Vantage Partners, he served in a number of high profile roles including as a law clerk to Justice Blackmun on the U.S. Supreme Court and as a Senior Researcher at the Harvard Negotiation Project. Danny has co-authored four books, including “Getting Ready to Negotiate – The Getting to Yes Workbook” with Roger Fisher, and is frequently cited in publications such as The Economist and Harvard Business Review. I have followed Danny’s work for a long time.  He first came to my attention as a thought leader and subject matter expert when while I was a Category Manager for Outsourcing & Offshoring, and I was delighted to welcome him onto the show. We focused our conversation on ways in which we can turn around difficult relationships, both with suppliers and internal stakeholders.

My guest on the show today is Walt Charles, the Chief Procurement Officer at Biogen. Walt will be well known to a number of listeners – he is a long time CPO with such illustrious companies as Johnson & Johnson’s Consumer Division, Kellogg’s, Kraft Foods, and now at Biogen. As you will hear in the interview, Walt is very passionate about the potential power of procurement, but also believes that some of our more traditional approaches – such as the parent principle - may no longer be fit for purpose. Walt has achieved significant results throughout his career by redesigning processes and investing in enabling tools and technology. In our interview we talk about the “how”, with a specific focus today on tools and technology. But in the first part of the interview, I wanted to dig a little deeper into Walt’s background, and his philosophies as a leader.

Back in September 2016, Kelly Barner and I opened the mic for 40 revolutionaries to share their thoughts on the future of procurement as part of The Procurement Revolution event. One of the conversations that we enjoyed the most was with Jack Miles, the former CPO of CIBC, AIG, Computer Associates and the Secretary of State for the Florida Department of Management Services. Our topic of conversation with Jack is just as relevant today as it was 18 months ago. We focused on the topic of mindset, and how a growth mindset is so important to be successful given the changing nature of procurement. In today’s show, I am publishing the Q&A with Jack in its entirety.